TRAI proposes ADC on ISPs

Regular

NEW DELHI: In a turnaround on its earlier stand of keeping ISPs outside the ambit of the IUC regime, TRAI is considering levying access deficit charge (ADC) on the ISPs.

TRAI's understanding that ISPs are not 'interconnecting parties' but just 'subscribers' of services of other service providers also bears out from the TRAI's own TTO dated December 3, 2003 (tariff for E1/R2 payable by ISPs) and even the one dated April 21, 2005 (Domestic Leased Circuits - see the section about E1/R2 tariffs payable by ISPs).

According to ISP Association of India (ISPAI) secretary Deepak Maheshwari, \"once we saw the Q3.7 of the instant consultation paper, it became obvious that though there is not even an indication for review of the authority's earlier decision about bringing ISPs under the IUC regime as far as ISPs may be entitled to receive termination charge, but it is considering to impose additional levy on ISPs.\" \"Hence, such questions are hovering beyond the realms of the IUC framework as notified by the Authority and hence, ought not to have been included. If somebody is not in the IUC regime, he is just not therein - neither for receivables nor for the payables,” he opined.

Reacting strongly to this development, he added, \"First and foremost, anybody claiming or seeking a subsidy (ADC is just that)- that too from its own competitors, should do so by substantiating such claims as a means of achieving the objectives of the public policy and such claims must stand up to the public scrutiny in a transparent and objective manner under regulatory supervision.”

Under the 'Interconnection Regime' basically the payment made by a subscriber to the access provider needs to be split across essentially three components, viz. 'origination', 'carriage / transit' and 'termination'. While for any particular call or a message, there is just one service provider involved with the 'origination' as well as for the 'termination' (at times, they could be same as well) the 'transit / carriage' may involve more than one service provider as well (e.g. NLDO as well as an ILDO).

ADC is admittedly a part of the IUC regime, which in turn, comes off the 'Interconnection Regime'. According to Maheshwari, in fact, in the UK where the very concept of ADC began, it is not known as 'Access Deficit Charge'; rather, 'access deficit contribution' and the computational formulation is part of the license granted to the incumbent, viz. BT.

When a subscriber dials into an ISP's network, the call is originated by an access provides and is terminated on to the ISP's network. When TRAI had notified its first IUC regulation in January 2003 and ISPs sought clarity that they would also be entitled to receive the 'termination' charge as envisaged therein, TRAI concluded in October 2003 that ISPs are not interconnecting parties and hence, beyond the ambit of the IUC regime.

Explaining the fallout of this move, he said, “If such a move is implemented, ISPs would be constrained in passing the same over to the subscribers and to that extent, their tariffs would have to inch up. Besides, adverse impact on the enterprises of all types including but not limited to, IT and ITeS, this would scare away a sizable number of broadband subscribers as well. After all, broadband access is a subset of Internet services.”

He also added that it is also worthwhile to mention herein that for 13 months since April 1, 2004, the incumbent had been charging a premium of 70 percent to ISPs for leased lines vis-à-vis other subscribers and even from May 1, 2005 a premium of 33 percent still continues.[/b]